Mr. Rajoy said that his goal was to arrange new Catalan elections within six months, so as to lift the measures taken under Article 155 as soon as possible.
It’s unclear, however, how such elections would be organized or whether they would significantly change Catalonia’s political landscape, let alone help to resolve the territorial conflict.
Mr. Puigdemont led a mass demonstration in Barcelona, the region’s capital, on Saturday afternoon, before giving his official response to Mr. Rajoy’s decision.
Several Catalan separatist politicians, however, reacted immediately to Mr. Rajoy’s announcement, warning that it would escalate rather than resolve the conflict.
Josep Lluís Cleries, a Catalan Senator, told reporters on Saturday that Mr. Rajoy’s decision showed that “the Spain of today is not democratic because what he has said is a return to the year 1975,” referring to Franco’s death. Mr. Rajoy, he added, was suspending not autonomy in Catalonia but democracy.
Significantly, Iñigo Urkullu, the leader of the Basque region, which also has a long history of separatism, described the measures as “disproportionate and extreme,” writing on Twitter that they would “dynamite the bridges” to any dialogue.
Faced with Madrid’s decision to remove him from office, Mr. Puigdemont could try to pre-empt Mr. Rajoy’s intervention and instead ask Catalan lawmakers to vote on a declaration of independence in coming days — as he had threatened to do earlier this month.
Mr. Puigdemont could also then try to convene Catalan elections, on his own terms, to form what he could describe as the first Parliament of a new Catalan republic.
Should Mr. Puigdemont resist Mr. Rajoy’s plans, Spain’s judiciary could separately step in and order that he and other separatists be arrested on charges of sedition or even rebellion for declaring independence.
Rebellion carries a maximum prison sentence of 30 years. Earlier this week, a judge from Spain’s national court ordered prison without bail for two separatist leaders, pending a sedition trial.
Using Article 155 “was neither our desire nor our intention,” Mr. Rajoy said on Saturday, but had become the only way to to return Catalonia to legality, normality and maintain a Spanish economic recovery “which is now under clear danger because of the capricious and unilateral decisions” of the Catalan separatist government.
Mr. Rajoy highlighted the decision of over 1,000 Catalan companies this month to relocate their legal headquarters outside the region, in response to the uncertainty generated by the possibility of a breakup with Madrid.
Mr. Rajoy received strong backing from politicians from the main opposition parties, with the notable exception of Podemos, the far-left party that wants to use a referendum to convince Catalan voters to remain within Spain.
“We’re shocked by the suspension of democracy in Catalonia,” Pablo Echenique, a senior official from Podemos, said in a televised news conference on Saturday, after Mr. Rajoy’s announcement.